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Machine hours and electricity costs for ABC Industries for the past eleven months were as follows:

Month Electricity Costs Machine Hours

January $12,600 2,000

February 14,000 2,400

March 9,310 1,400

April 15,200 2,600

May 19,000 2,300

June 15,500 3,300

July 17,000 3,600

August 15,500 3,000

September 10,700 1,500

October 17,700 3,300

November 21,000 4,200

Required:

a. Using the high-low method, develop an estimate of variable electricity costs per machine hour. (Round to the nearest penny)

b. Using the high-low method, develop an estimate of fixed electricity costs per month.

c. Using the high-low method, develop a cost function for monthly electricity costs.

d. Estimate electricity costs for a month in which 5,000 machine hours are worked.